Do it nicely. Upvote guaranteed. Dec 31Purchased new equipment for P750,000, paying P150,000 cash andsigning a 3-year, 7% note for the remainder. The note will be paid in threeequal, annual installments of P200,000 starting Dccember 31, 2022.Dec 31Honored waranty contracts on 12 units for a total cost of P11,500.Coverage for 30 units have expired from the warranty contracts includedin the December 1 balance. Repair costs for these units were estimated atP675.Requirements:a. Journalize each transaction and prepare the necessary adjusting entries.b. Prepare the liabilities section of the balance sheet for the year ended December31, 2021. The following are the transactions of K-Dynamite Company for the calendar year endedDecember 2021. Accounts Payable and Est Warranty Liability has beginning balances ofP128,000 and P67,500 on December 1, respectively. The company uses perpetualinventory for their inventory management system.Dec 1Received P200,000 from a lessee as payment for rent of a specializedequipment. The lease has a term of five months starting November 2021.Dec 8Purchased P975,000 merchandise inventory on account. Credit term is2/10, n30 with sales discount allowed on partial payments within thediscount period.Dec 10Billed a customer who bought 600 units of Product V at P4,200 each. It isexpected that 5% of the units will be defective and that repair costs willaverage P850 per unit. The standard warranty coverage period on thecompany's products is 1 year.Dec 11Returned P15,000 worth of defective merchandise from Dec 8's purchase.During the last board meeting, the company's board of directors approvedthe company's strategic plan to expand its operations in Iloilo. BorrowedP1,200,000 from a bank by signing an 8-month, 12% interest-bearing note.Dec 15Dec 18Paid 75% of the balance on the inventory purchased on December 8.Sucd by an employce who claims to have been illegally dismissed. Legalcounsel believes that there is a 35% probability that the company will haveto pay P80,000 in damages next year.Dec 28

Warranty expense refers to the expenses which is to be incurred by a business entity in case their…

Dec 31 Purchased new equipment for P750,000, paying P150,000 cash and signing a 3-year, 7% note for the remainder. The note will be paid in three cqual, annual installments of P200,000 starting December 31, 2022. Dec 31 Honored warranty contracts on 12 units for a total cost of P11,500. Coverage for 30 units have expired from the warranty contracts included in the December 1 balance. Repair costs for these units were estimated at P675. Requirements: a. Journalize each transaction and prepare the necessary adjusting entries. b. Prepare the liabilities section of the balance sheet for the year ended December 31, 2021.

Dec 31 Purchased new equipment for P750,000, paying P150,000 cash and signing a 3-year, 7% note for the remainder. The note will be paid in three cqual, annual installments of P200,000 starting December 31, 2022. Dec 31 Honored warranty contracts on 12 units for a total cost of P11,500. Coverage for 30 units have expired from the warranty contracts included in the December 1 balance. Repair costs for these units were estimated at P675. Requirements: a. Journalize each transaction and prepare the necessary adjusting entries. b. Prepare the liabilities section of the balance sheet for the year ended December 31, 2021.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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